CHILLICOTHE OHIO BLOG

Why Use a REALTOR® When Selling?

2011-03-07T17:26:00.000-08:00

A real estate agent helps you understand everything you need to know about selling
By Ron Schmeadick

The selling process generally begins with a determination of a reasonable asking price. Your real estate agent or REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

Marketing

The next step is a marketing plan. Often, your agent can recommend repairs or cosmetic work that will significantly enhance the salability of the property. Marketing includes the exposure of your property to other real estate agents and the public. In many markets across the country, more than 50 percent of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer.

Your agent acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.

Advertising is part of marketing. The choice of media and frequency of advertising depends a lot on the property and specific market. For example, in some areas, newspaper advertising generates phone calls to the real estate office but statistically has minimum effectiveness in selling a specific property. Overexposure of a property in any media may give a buyer the impression the property is distressed or the seller is desperate. Your real estate agent will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82 percent of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts.

Security

When a property is marketed with an agent's help, you do not have to allow strangers into your home. Agents will generally pre-screen and accompany qualified prospects through your property.

Negotiating

The negotiation process deals with much the same issues for both buyers and sellers, as noted above under the buying process. Your agent can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your agent can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

Monitoring, renegotiating and closing

Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your agent is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

Why use a REALTOR®?

All real estate licensees are not the same. Only real estate licensees who are members of the National Association of REALTORS® are propertly called REALTORS®. They proudly display the REALTOR® logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that almost 85 percent of home buyers would use the same REALTOR® again.

You be the judge

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.

Copyright © by Move, Inc.

What Do Buyers Want? Sprinkles or Filling?

2011-02-11T07:31:00.000-08:00

Most folks used to be content with a nice slice of yellow cake on a special occasion. Now people want elaborately flavored and decorated cupcakes every day of the week.

Some home buyers have also seen one too many cupcake shows on HGTV and think more about the sprinkles than is good for them. But even these buyers may not be willing to pay for for everything they say they want.

An over-improved house -- if over-priced to match -- can be harder to sell than the more modest home. Very few buyers will pay for extravagant personal choices that the previous owner made.

So what do buyers really want when they are choosing a home?

1) Buyers want a deal: only a few buyers say "steal" a house but they do want to know that they are getting the most value for the money.

2) Buyers want a clean house. Not just a tidied-up house, but a house with clean baseboards, windows, siding, refrigerator and cabinets. Clean carpets are essential, no one needs to know you got a new puppy last year.

3) Buyers want a house with a neutral palette to make it easy for to imagine their unique decorating plans.

4) Buyers want current light fixtures and hardware. Light fixtures are essential to showing how nice a room can look -- or not. Buyers prefer brushed nickle, stainless or bronze finish hardware.

5) Buyers want updated kitchens and baths. You may not be able to completely remodel your kitchen, but some freshening up can make a big difference.

6) Buyers want a garage that looks big enough for their cars. A 2 car garage needs to look large enough to hold 2 cars, not 1 car and piles of stuff. Rent a storage locker for excess.

7) Buyers want rooms that look like their intended purpose. A dining room needs to look like it's for eating and entertaining, not a sports locker or data center.

8) Buyers want a house with reasonable energy costs. While most buyers in our area won't pay substantially more for "green" and "energy efficient" improvements, they do want to know what it will cost to heat and cool the house.

9) Buyers want a house that fits their stage of life and activities. Don't be discouraged if your house isn't a perfect fit for all buyers but you should market aggressively to your target.

10) Buyers want a place to make their own. Make your home into a house that the next owner can easily envision himself living in.

Compliments of Leslie Ebersole

Freddie and Fannie are at it again!

2011-01-11T15:43:00.000-08:00

Fannie Mae and Freddie Mac are at it once again! While I understand the need for some of the changes (very few actually) made over the last several years many have become a hinderance to a housing recovery. The pendulum has swung from very little to way too much. Ok! OK! I'll get to the point.....

I am talking about the changes to "Risk Based Pricing." RBP for short. RBP has been around for quite some time now. I am not opposed to this. Basically what RBP does is reward those who are deemed less risky borrowers and charge a premium for those who are deemd more credit risky. Think of the difference between a 640 credit score and a 740 credit score. I remember when I was a Broker many years ago, one of my lenders sent out a matrix that showed the statistical likelyhood of someone defaulting for every 20 points up or down in credit score. Credit score is just one part of RBP.

Few people know that just about every bank out there gets their money to lend from these two government agencies so they set the guidelines, parameters, and matrixes. What they are proposing now to the RBP scenario could put a big damper on any momentum or recovery in the housing market. Basically what they are proposing is that anyone who is getting a loan is a RISK!!!!

For example: You have a buyer with an 800 credit score who is going to put 25% down. Great credit, good money down. Seems like a low risk borrower. Well not according to what may come out. This borrower would be charged what is called a .25% hit or add on thereby increasing their interest rate.

Another example: If you have a borrower who has a 679 credit score and is going to put down the same amount? They will be charged a 2.25% add on/ hit!!!!!

Condo? .75% hit/add on Adverse Market? .25% hit.

If this happens it could push good buyers into rentals. Stay aware of what is happening and stay active. What happens in the lending arena could not only affect my livelyhood and the service I provide to my clients but it will trickle down in to the Realtor arena as well.

2010-07-15T19:48:00.000-07:00

Fielding a Lowball Purchase Offer on Your Home

Consider before you ignore or outright refuse a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale. Read
Keep Your Home Sale from Falling Apart

After finding a buyer, all you have to do to make it to closing is to avoid these five traps. Read
6 Reasons to Reduce Your Home Price

While you’d like to get the best price for your home, consider our six reasons to reduce your home price. Read
6 Tips for Choosing the Best Offer for Your Home

Have a plan for reviewing purchase offers so you don’t let the best slip through your fingers. Read
7 Tips for a Profitable Home Closing

Be sure you’re walking away with all the money you’re entitled to from the sale of your home. Read

Visit houselogic.com for more articles like this.

Real Estate Radio

2010-07-15T19:23:00.000-07:00

Check out the "Real Estate Today Radio"....Its the CNN of Real Estate

http://retradio.com/mp3/retplayer.swf

I couldn't be more excited about this announcement!!!!

2009-05-15T12:50:00.000-07:00

News Release

NATIONAL ASSOCIATION OF REALTORS
The Voice For Real Estate®
500 New Jersey Avenue, NW
Washington DC 20001
PUBLIC AFFAIRS
For Further Information Contact:
Mary Trupo, 202/383-1007
mtrupo@realtors.org
Uniform Process for Short Sales Will Help Struggling Homeowners, Say RealtorsÒ
WASHINGTON (May 14, 2008) – Help is on the way for many homeowners who are facing foreclosure, thanks to new details under the Making Home Affordable Program announced today by the U.S. Treasury and the U.S. Department of Housing and Urban Development.
The Making Home Affordable Program is designed to help homeowners obtain modifications to their loan so they can afford to stay in their home. Where a modification is not possible, new incentives encourage the “quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future,” according to U.S. Treasury Secretary Timothy Geithner. The National Association of Realtors® expects that a uniform process for handling short sales and financial incentives will facilitate this process.
“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s homeowners in challenging economy.”
Short sales occur when a bank agrees to let homeowners who have fallen behind on their mortgage to sell their home for less than they owe on their mortgage. Visit www.treasury.gov for detailed information on the program changes.
“Many families are finding themselves with a mortgage that is higher than their current home value, and they are struggling,” said McMillan. “As Secretary Geithner noted, and as NAR has been advocating for many months, stemming the foreclosure crisis and stabilizing the housing market are critical to our economic recovery.”
“We have heard from Realtors® that the extensive delay in the short sale process had caused many buyers to go elsewhere and have left many would-be sellers with no option but foreclosure. We are all pleased that the government has stepped in to help homeowners and those wishing to buy a home,” McMillan said.
-more- #073

Uniform Process for Short Sales will Help Struggling Homeowners, say RealtorsÒ – add 1
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
###
Information about NAR is available at www.realtor.org. This and other news releases are posted in the Web site’s “News Media” section in the NAR Media Center.

Make your home affordable

2009-05-13T07:38:00.000-07:00

This is full of valuable information. Find out if you are eligible to make your home more affordable.

BE CAUTIOUS of sites or Foreclosure programs that ask you to give them money or sign your deed over to them for a certain amount of time.

http://www.makinghomeaffordable.gov/

Freddie Mac Video - Making Home Affordable and Avoiding Foreclosure Rescue Scams

2009-05-13T07:17:00.001-07:00

Here is a VERY VALUABLE video!!

Look on FreddieMac website to see if you have a FreedieMac Mortgage.

Freddie Mac Video - Making Home Affordable and Avoiding Foreclosure Rescue Scams

Government Expansion of Foreclosure Prevention

2009-05-01T12:39:00.000-07:00

Government Expansion of Foreclosure Prevention:

Second Liens and Hope for Homeowners Modified
The President said this past week that government is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program. Much like the rest of the program recently announced however, we will withhold judgment until results start being achieved.
The president's current $75 billion program has gotten off to a slow start. Loan servicers only recently started taking applications and many delinquent borrowers have complained about not being able to qualify for the program.
The administration is now seeking to address some of the concerns by changing the original modification plan, which calls for adjusting eligible borrowers' loans so monthly payments are no more than 31% of pre-tax income.
The main issue with the current program for many borrowers is that up to half of at-risk borrowers have second liens, according to recent government reports.
Under the administration's new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor.
The servicers will be paid $500 for each modification and an additional $250 annually for three years if the borrower stays current. Borrowers can receive up to $250 per year for five years to pay down their first mortgage.
In addition, investors can also receive a payment in exchange for extinguishing the second lien. They would receive 3 cents on the dollar for loans more than 180 days delinquent and between 4 cents and 12 cents for less delinquent loans, depending on the borrowers' debt levels.
Servicers who join the new program must modify second loans when a borrower's first mortgage is adjusted. It will likely take a month to implement is the information being presented.
In addition, the administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.
Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.
Servicers would now have to reduce the principal to 93% of the home's value. The change would also reduce the program's high fees, which turned off many troubled borrowers.
As an incentive to participate, servicers will be paid $2,500 for each refinancing, while lenders who originate the new loans will receive up to $1,000 a year for three years, as long as the loan remains current.
These plans are all steps in the right direction to try and help additional borrowers who have not had results with the current initiatives. How effective they will be is still yet to be determined.
Second Liens and Hope for Homeowners Modified
The President said this past week that government is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program. Much like the rest of the program recently announced however, we will withhold judgment until results start being achieved.
The president's current $75 billion program has gotten off to a slow start. Loan servicers only recently started taking applications and many delinquent borrowers have complained about not being able to qualify for the program.
The administration is now seeking to address some of the concerns by changing the original modification plan, which calls for adjusting eligible borrowers' loans so monthly payments are no more than 31% of pre-tax income.
The main issue with the current program for many borrowers is that up to half of at-risk borrowers have second liens, according to recent government reports.
Under the administration's new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor.
The servicers will be paid $500 for each modification and an additional $250 annually for three years if the borrower stays current. Borrowers can receive up to $250 per year for five years to pay down their first mortgage.
In addition, investors can also receive a payment in exchange for extinguishing the second lien. They would receive 3 cents on the dollar for loans more than 180 days delinquent and between 4 cents and 12 cents for less delinquent loans, depending on the borrowers' debt levels.
Servicers who join the new program must modify second loans when a borrower's first mortgage is adjusted. It will likely take a month to implement is the information being presented.
In addition, the administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.
Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.
Servicers would now have to reduce the principal to 93% of the home's value. The change would also reduce the program's high fees, which turned off many troubled borrowers.
As an incentive to participate, servicers will be paid $2,500 for each refinancing, while lenders who originate the new loans will receive up to $1,000 a year for three years, as long as the loan remains current.
These plans are all steps in the right direction to try and help additional borrowers who have not had results with the current initiatives. How effective they will be is still yet to be determined.

Another reason not to leave your home

2009-04-01T12:32:00.000-07:00

I just caught wind of this article from the NY Times newspaper and thought I would share.

http://www.nytimes.com/2009/03/30/us/30walkaway.html?pagewanted=1&_r=2&ref=patrick.net

Trulia Newsletter

2009-03-26T06:45:00.000-07:00

Hey Everyone,

Here is some good information from Trulia in regards to buying or renting.

Trulia E-Newsletters
Sign up for the Trulia NewsletterGet time-saving tips and tricks to finding your dream home, check out the latest steals and deals, and get the scoop on celebrity pads every week. You can change your subscription anytime (but we hope you'll stick around).
Cool, subscribe me.

March 26, 2009 Past Newsletters

Should you rent or buy right now?

Check out this unique Chicago, IL condo $325K, 3bd/2ba/1,500 sqft
With an “iffy” economy and the recent changes in first time home buyer incentives , figuring out if you should rent or buy can be tricky. Can you afford the down payment? Or, is it cheaper to rent? Luckily, here are two awesome tools to help you make that hefty decision. First, find a home you like. Then, try the Rent vs. Buy calculator to find out how much you can save by renting or buying. Or, use the Mortgage calculator to get an idea of what your monthly payments would be. What do you have to lose?
Rent vs. Buy calculator

Mortgage calculator

If you can’t decide whether now’s the right time to rent or buy in your area, this tool’s for you. Compare the cost of owning versus renting a home to see which option may be a better fit for you.
Use our mortgage calculator to estimate total monthly payments for your future home as well as the total amount due over the life of the loan.

House of the week Want a Coke with that house?

This Hotlanta mansion definitely caught our eye with its Southern charm, especially since it was the previous pad of former Coca-Cola Company President and philanthropist Robert Woodruf. The 1930s Regency-style house boasts blood-red dining room walls that can only be characterized as flamboyant. It certainly fits the neighborhood air, the aptly-named Tuxedo Park.

How to determine your homeowner's insurance coverage sponsor

Your home may be the biggest investment you'll ever make. So if you're serious about protecting that investment, here is some important information to consider when determining the coverage amount for your home. 1. Make sure that your home is insured for at least 100% of its estimated replacement cost. 2. Understand the difference between market value and replacement cost for insurance purposes. 3. When buying a new home, be sure to obtain a replacement cost estimate. Read more about homeowner's insurance » These tips brought to you by State Farm Insurance.

Celebrity Home Sightings Get your superficial fix here.
Jay Cutler, star Quarterback for the Denver Broncos, puts his house in Parker, CO for sale
$2,000,000 4br / 7ba / 7,516 sqft

Former home of Newlyweds couple Jessica Simpson and Nick Lachey in Calabasas, CA gets listed for $3.9M
$3,995,00 5br / 6.5ba / 6,483 sqft

Seattle Mariners star Ichiro Suzuki lists his luxury home with unobstructed views of Lake Sammamish
$1,750,000 5br / 4.5ba / 4,920 sqft

Advice & Opinions Ι Get insightful, fast, FREE advice on home buying & selling
Blog of the week
You want to remodel, but how? We are hearing that a lot of people (would-be clients, if you will) are reaching a mental road block caused by lack of information. They have a home project they want to take on...maybe even need to...but all they've heard is how difficult financing is obtain these days or that construction loans just aren't available… Written by Jamie , Other/Just Looking in Bellevue, WA Read more or comment »

Question of the week
Q: I want to take advantage of the $8K tax credit; can I delay the close date by a month? Asked by Gixxersixxer, Home Buyer in FS, CA A: It never hurts to ask. Contracts are a 2 way street, and as long as the request is legal, and both parties agree, you can change just about anything. Your request seems very reasonable especially since there is nobody living in the house who would be affected... Answered by Jim Cheney , Real Estate Pro in Santa Rosa, CA Read more or reply »
Real Estate Eye Candy Trulia picks
Recent trend: Granite countertops
Why not save yourself a few bucks and consider entertaining at home. Bonus: You can show off those trendy granite counters to mom.

Baltimore, MD $314,900 2br / 2ba / 1,152 sqft Calculate mortgage

Nashville, TN $369,000 3br / 3ba / 1,731 sqft Calculate mortgage

St. Charles, MO $240,000 3br / 2ba / 1,854 sqft Calculate mortgage

Is your home fading away?

2009-03-18T12:07:00.000-07:00

In today's real estate market you are not alone if you are experiencing periods of financial instability and facing numerous hardships in trying to keep up with your mortgage payments and paying your monthly bills.
Each day can be a struggle trying to cope with the unbearable stress and heartache knowing there is a possibiity that you might lose your home to foreclosure or may have to file for bankruptcy.
Do you know that foreclosure is not the only option? Don't let his happen to you because you didn't know what they are.
An alternative to foreclosure is pursuing the option of a short sale. A short sale is the sale of your home negotiated with a bank or mortgage compnay to accept less than what is owed on the property
Did you know that banks prefer to do a short sale over a foreclosure? Banks are not in the business of owning property and do not want to foreclose on you.
In order to qualify for a short sale, you must have a demonstrable financial harrdship. You will have to prove this hardship through a signed letter that will be submitted toyour mortage company along with other documentation.
What is an Acceptable Hardship?
A hardship can be defined as a material change in the financial situation of a homeowner that is or will affect their ability to pay their mortgage.
Examples of acceptable financial hardship are:
1. Loss of Job
2. Business Failure
3. Damage to Property
4. Death of a Spouse
5. Death of family members
6. Severe Illness
7. Inheritance
8. Divorce
9. Mandatory Job Relocation
10. Medical Bills
11. Military Service
12. Payment Increase or Mortgage Adjustment
13. Insurance or Tax Increase
14. Reduced Income
15. Separation
16. Too much debt
17. Incarceration
If you are finding yourself is a situation where you need to sell, owe more than your home is worth or have been late with your mortgage payments a short sale may be an option for you.
Disclaimer: This post is not intended to be or to provide legal advice. We recommend that you speak to your attorney and your tax accountant regarding specifics and to find out if this is the best option for you in your situation.
************************************************************************************************
Compliments of Donna Bigda

Are you prepared to live in Your Parent's Basement?

2009-03-05T11:23:00.000-08:00

Its been awhile since I posted so I owe you 2 posts:)

Ok, so the title is a scary thought to most of us, and I won't say that the picture I am painting applies to all, but there are some reading this or others you know that will be experiencing this reality soon.
The Economy
Watching the news lately is painful and everyday it seems to get worse.
Two days ago it was about the stock market dipping below 7,000 points. Today, two stories are dominating the news. First Citigroup's stock has fallen under $1 per share, which considering their 52 week high was over $27, is simply ridiculous. Citi has its hands in so many pies, the destruction of this company would have consequences that are hard to imagine.
GM was also in the news today. An accounting firm basically said that there survival is doubtful the way they are going. Bankruptcy seems likely, the company ceasing to exist is a possibility.
What does this mean for Housing?
If any or most of these things come to fruition it means job losses. It means foreclosures. It mean bankruptcies. This is very good news for the financially stable as they will continue to be able to buy homes at prices that seem way to good to be true. But where do the jobless and homeless turn? Mom and dad might be the answer.
Mom and Dad, can I come back?
Most of us would never dream of having to move back in with our parents, but for many in America this is becoming a reality. A sad, terrifying reality for many, or at least an embarrassment for most. It is tough to "fail" and have to go back to the place where you were taken care of as a child, only to have to be taken care of again.
In other cultures this is actually not that big a deal. Many people live with their extended families to save money and it is considered somewhat normal. A crowded house to some is a good thing.
The larger question that should be asked is why do I no longer own my home and my parents still have theirs and in many cases it is paid off?
The answer lies in a generational shift that has occurred from our parents to us. Debt was frowned on more when our parents were originally buying homes. Banks actually wanted you to put some of your own skin in the game (they are getting back to this now.) Once they were in them, they stayed in them. My parents have lived in the same house for 30 years. The generation before them was even more removed from us today. My mother grew up in a household of 7 people with one bathroom and about 1000 square feet. People made due, they got by somehow.
Today is different. We need BIG, we need a room and bathroom for everyone in the home. When we can't pay for things we charge them and hope for money tomorrow to pay the bill. What happened to us? When did enough not become enough anymore?
The reality is I think this country has spent its way back into how things use to be. I am sensing a shift in thinking towards small is okay and big is unneeded.

Can you PASS this Test- Something for FUN!!

2009-03-05T10:55:00.000-08:00

Do you know when to start packing? How is the "Rule of Three" applied? What's the best way to make the laundry room appeal to buyers? What can you do to make the room look larger? What is an affordable item that can be used throughout the home for staging?

I found this quiz to test your Staging savviness on Realtors.org. Its short and fairly easy, for stagers anyway. Some questions make you think twice, however. Barb Schwarz, of Stagedhomes.com, help create this quiz.

If you score 100% rest assured you have a talent for staging and should use that talent to help sell your home in a shorter time period and for top dollar.

Mortgage Daily News

2009-01-29T07:27:00.000-08:00

For those of you that like to keep up with the current mortgage news. I have found this link for you. It is updated daily for your review:

http://www.mortgagenewsdaily.com/

FORECLOSURE DEFICIENCY JUDGMENT or SHORT SALE PROMISSORY NOTE or BANKRUPTCY? - REVISITED

2009-01-27T11:37:00.000-08:00

Whether to agree to a negotiated promissory note in a short sale or allow the house to go to foreclosure is one of the most discussed topics around. It deserves a simple comparison.

A negotiated promissory note is ALWAYS better than a deficiency judgment resulting from a foreclosure। Here is why:
Deficiency Judgment -
1. You have a foreclosure judgment against you and if you fill out most applications about your background you will have a question on if you had a property foreclosed upon you.
2. You have a deficiency judgment which is a money judgment against you which means ANYTHING you buy is subject to attachment by the creditor, be it a car, a toaster, or a new swing-set for your kids.
3. Your wages can be garnished.
4. Your bank accounts can be frozen and attached - without any notice in advance to you.
5. You will be subject to periodic depositions in aid of execution and have to provide copies of all of your financial matters - several times a year. If you repeatedly don't show up the court can hold you in contempt of court and even put you in jail (YES - JAIL!!) until you comply.
6. In Florida (check other states) you can enjoy each of the above for 20 full years before the judgment is no longer enforceable.
7. The judgment usually carries interest. Check your state for the rate. For judgments rendered in 2009 the Florida statutory rate is 8%.
8. FANNIE-MAE underwritten mortgages cannot be obtained until 5 years after the foreclosure judgment.
Negotiated Promissory Note -
1. You pay an agreed amount according to the promissory note, which is usually monthly and often at no interest.
2. If you no longer can pay you may be able to negotiate a new payment amount or abate payments for a period of time.
3. You may be able to re-negotiate the terms of the promissory note in the future.
4. The promissory note is not a judgment so it does not show up on the credit report.
5. If a foreclosure suit was entered, even if it went to a foreclosure judgment (but not a sale), the lender will likely dismiss the suit and vacate the judgment, clearing your record - even before you start paying on the promissory note.
6. If you stop paying on the promissory note the note holder can then seek a money judgment for the unpaid amount.
7. FANNIE-MAE underwritten mortgages can be obtained after a short sale in just 2 years.
8. Once you repay the promissory note the lender should remove degrogatory credit report postings regarding the payment of the mortgage for "less than the agreed amount", instantly repairing your credit score.
Bankruptcy -
Many people speak to me about Bankruptcy as the better option. It is an option - but when it should be used is a big issue.
Declaring bankruptcy is a LAST RESORT. In a chapter 13 (personal reorganization) you are effectively "betting the farm" that you can perform for the 5 or so years of planned payments. If you default you revert to either a dismissal or a chapter 7 total liquidation- and you cannot refilefor many years. Bankruptcy also is a final chapter so to speak. There are no further remedies available to you for protection from creditors. It is like one bullet in a pistol - you need to decide when is it absolutely, positively without any doubt necessary to pull the trigger. You need to expand your horizons to not just today, but tomorrow and maybe thousands of tomorrows (days) before you can walk back into bankruptcy court. Chapter 13 and Chapter 7 have their useful purposes but they must be used prudently and carefully. A bankruptcy is the worst hit you can give your credit report.
If a promissory note just does not work out and the lender is relentless and THEN gets a judgment for payment of the note amounts, you will then be in no worse situation than if there was a deficiency judgment. In my opinion you will be in a better position if you weigh the positive and negatives of each position and work your way slowly and methodically through the available remedies step by step. If at the end of the line it did not work out, then you have the bankruptcy alternative remedy. But without giving each step an opportunity to work for you makes no sense - don't throw your self overboard!
Copyright 2009 Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website http://www.florida-counsel.com/. See our easy to find articles at Need Short Sale Information? - These Articles Probably Answer Your Question